Building African success stories, from Startup to Series A

As 2019 comes to an end, we look back on a productive year! VC4A passed many key milestones, one that included welcoming our 100,000th member to the community. The global network now spreads across 160 countries, bringing people together in a shared mission to build and grow the greatest ventures from across Africa.

VC4A links transformational entrepreneurs to growth opportunities, and we are pleased to share that an ever greater number of entrepreneurs are finding success through the VC4A network, platform, and programs. Whether following courses on the Startup Academy, finding a Mentor through the Mentorship Marketplace, fundraising through VC4A’s network of investors, or connecting to one of the many Opportunities presented by VC4A’s partner organizations, it’s getting easier and easier for entrepreneurs to find the support they need.

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The investor community is responding in force, where the most recent overview presents a dynamic landscape of investors offering increasing amounts of startup and VC funding to the continent’s brightest and best entrepreneurs.

Showcasing Venture Success

Working with VC4A’s community of investors, and for entrepreneurs ready to scale their venture, companies are referred to the VC4A Venture Showcase – a selective program for companies that seek Series A level funding and where alumni have raised more than USD 68 million in VC funding. While capital is only one small part of the story, the progress of these companies confirms a new narrative for the continent rich with opportunity. The quality of entrepreneurs, and the growth of these ventures, takes place against a backdrop of increasing activity we see across the network. The African startup ecosystem is reaching a new tipping point. Truly exceptional. But looking at just a small selection of data points, we can see there are tough questions we need to answer now as a community moving forward:

$68M+ raised cumulatively across 27 deals

What happens next? As these businesses deploy this capital, are we sure there is enough money available for the next rounds? Where is this capital going to come from? Will new players and efforts emerge from within the industry or will we have to look outside Africa’s borders for these follow on rounds? What are the positives and negatives of this new capital and/or what new risks are introduced now? How do we balance an aggressive optimism with healthy doses of realism? Do our expectations match those of the investors we need to bring into the picture now?

18% co-founded by women

On par with New York or San Francisco, but we don’t like comparisons anyway. Are we happy with this or are we going to drive a new global benchmark and how are we going to achieve this? Certainly, there is more progress on the way as women-focused angel groups start to form and women-focused VC funds come online, with a growing rank of female entrepreneurs and investors leading the industry.

27% are in Fintech

Fintech, Fintech and some more Fintech :) Did we reach the ceiling on this? Is this the same herd mentality we saw with pay-as-you-go? Is it necessary to the process of developing such verticals or a symptom of being too risk-averse and not being willing to apply the creative energies needed to look deeper? Where are we going next and how can we push further into fields like agriculture, healthcare, and education? Certainly sectors at the core of my own interests, and also the fastest-growing segments on the VC4A platform.

More than 45 investors involved

It’s great to be expanding our ranks, but more importantly, to see investors working more closely together and a marked increase in the sharing of deal flow. It is a forming community of investors that results in a greater number of businesses raising more capital and closing more rounds than ever before. Still, there is a lot to be desired, where we now seek out the following:

  • More angel groups investing
  • Better flow of opportunities from Angels to VCs
  • More specializations in the capital available
  • Follow on capital for Series B, C and D.

It can’t be that an entrepreneur has only one local angel group or fund to pitch to – make or break. More options for entrepreneurs are needed.

Building an inclusive industry

Finally, what are we doing to make our industry more inclusive? How are we going to ensure a broader impact that extends beyond the 1%? We know talent can come from any corner of the continent, but resources are highly concentrated in just a few cities. How can we extend infrastructure and improve access to opportunities for entrepreneurs regardless of where they are located? Certainly, a question core to the efforts of VC4A and what drives our enthusiasm for the Startup Academy where any entrepreneur with an Internet connection is able to tap the best insights and learnings shared by leaders from across the industry. This is a strong example of how together as a community we are able to crowdsource new knowledge resources that are available for everyone.

Find these great companies and engage these founders through!

Looking towards 2020

Where there are many questions that remain to be answered, we know there are needs and opportunities all around us. This is why we can give our work so much energy and conviction.

At the heart of our network are the 13,500 entrepreneurs building high-growth high-impact ventures. These companies have the power to create tangible economic, social and environmental impacts – and where VC4A helps them realize their potential.

Africa’s VC market today is comparable to Southeast Asia in 2014. The numbers are surprisingly similar. In 2018, Africa accounted for $1.163B in investment vs. Southeast Asia which was $1.163B, across 164/165 rounds respectively. This is just before the Southeast Asia tech scene exploded and where now more than $6B is invested annually. Whether or not this is an accurate view into our own future, we know this is the tipping point we have all been waiting for. We can’t wait to level up again next year!

Join the ranks andengage!

Please engage these founders. If you are not going to invest, think about other ways you can help these businesses grow. Either with insights in the industry or by making an introduction. Consider joining the VC4A network of mentors or signing up as an investor. If you are forming your own team to build the next great company, register a Venture Profile and take advantage of the VC4A network. And for those organizations that plan to set up new events and entrepreneur support programs, we look forward to hearing from you!

At the end of the day, we build this industry together knowing that the success of these entrepreneurs holds the future of this industry and remains a driving force for the continent.